Bill Text: HI SB3229 | 2024 | Regular Session | Introduced
Bill Title: Relating To Insurance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2024-02-16 - Report adopted; Passed Second Reading, as amended (SD 1) and referred to JDC/WAM. [SB3229 Detail]
Download: Hawaii-2024-SB3229-Introduced.html
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THE SENATE |
S.B. NO. |
3229 |
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THIRTY-SECOND LEGISLATURE, 2024 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
"§431:2-A Program to
investigate complaints, respond to inquiries, and bring enforcement actions
against insurers or producers. (a)
The commissioner shall establish a program on or before July 1, 2025, to
investigate complaints and respond to inquiries received pursuant to section
431:2-B, to comply with section 431:2-C, and, when warranted, to bring
enforcement actions against insurers producers pursuant to section 431:2‑203. The program shall include but not be limited
to the following:
(1) A toll-free telephone number published in telephone books throughout the State, dedicated to the handling of complaints and inquiries;
(2) Public service announcements to inform consumers of the toll-free telephone number and how to register a complaint or make an inquiry into the insurance division;
(3) A simple, standardized complaint form designed to assure that complaints are properly registered and tracked;
(4) Retention of records on complaints for at least three years after the complaint has been closed;
(5) Guidelines to disseminate complaint and enforcement information on individual insurers to the public that shall include but not be limited to the following:
(A) License status;
(B) Number and type of complaints closed within the last full calendar year, with analogous statistics from the prior two years for comparison. The proportion of those complaints determined by the commissioner to require that corrective action be taken against the insurer, or leading to insurer compromise, or other remedy for the complaint, as compared to those that are found to be without merit. This information shall be disseminated in a fashion that shall facilitate identification of meritless complaints and discourage their consideration by consumers and others interested in the records of insurers;
(C) Number and type of violations found, by reference to the line of insurance and the new law violated; provided that the commissioner shall separately report this information for health insurers;
(D) Number and type of enforcement actions taken;
(E) Ratio of complaints received to total policies in force, or premium dollars paid in a given time, or both; provided that private passenger automobile insurance ratios shall be calculated as the number of complaints received to total car years earned in the period studies; and
(F) Any other information the commissioner deems is appropriate public information regarding the complaint record of the insurer that will assist the public in selecting an insurer; provided that nothing in this section shall be construed to permit disclosure of information or documents in the possession of the commissioner to the extent that the information and those documents are protected from disclosure under any other provision of law;
(6) Procedures and average processing times for each step of complaint mediation, investigation, and enforcement, that shall be consistent with any other law requiring procedures to be followed by the insurance division in investigating or prosecuting complaints against insurers or producers;
(7) A list of criteria to determine which violations should be pursued through enforcement action, and enforcement guidelines of appropriate penalties for violations based on the nature, severity, and frequency of the violations;
(8) Referral of complaints outside the insurance division's jurisdiction to appropriate public and private agencies;
(9) Complaint handling goals that can be tested against evaluations carried out pursuant to section 431:2‑C(b); and
(10) Inclusion in its annual report to the legislature required by section 431:2-211, detailed information regarding the program that shall include but not be limited to:
(A) A description of the operation of the complaint handling process, listing civil, criminal, and administrative actions taken pursuant to complaints received;
(B) The percentage of the insurance division's personnel years devoted to the handling and resolution of complaints; and
(C) Suggestions for legislation to improve the complaint handling apparatus and to increase the amount of enforcement action taken by the commissioner pursuant to complaints if further enforcement is deemed necessary to ensure proper compliance by insurers or producers within the law.
(b) The commissioner shall adopt rules pursuant to chapter 91 that set forth the criteria that the insurance division shall apply to determine if a complaint is deemed to be justified before the public release of a complaint against a specifically named insurer or producer.
(c) The commissioner shall provide to the insurer or producer a description of any complaint against the insurer or producer that the commissioner has received and has deemed to be justified at least thirty days before public release of a report summarizing the information required by this section. The description shall include all of the following:
(1) The name of the complainant;
(2) The date the complaint was filed;
(3) A succinct description of the facts of the complaint; and
(4) A statement of the commissioner's rationale for determining that the complaint was justified, which applies the commissioner's criteria to the facts of the complaint.
(d) An insurer shall provide to the commissioner the name, mailing address, telephone number, and facsimile number of a person whom the insurer designates as the recipient of all notices, correspondence, and other contacts from the insurance division concerning complaints described in this section. The insurer may change the designation at any time by providing written notice to the commissioner.
(e) The commissioner may establish an internet-accessible complaints response system to distribute and receive complaint information as described in subsections (a) and (c). Insurers shall submit and receive complaint information, including but not limited to requested claim files, underwriting files, correspondence, and other supporting documents, using any system established by the commissioner pursuant to this subsection.
(f)
For the purposes of this section, notices, correspondence, and other
contacts with the designated person shall be deemed contact with the insurer.
§431:2-B Complaints and inquiries; investigation
and prosecution; public education and dissemination of information. (a) The commissioner shall receive
complaints and inquiries, investigate complaints, prosecute insurers or producers
pursuant to section 431:2-203, and respond to complaints and inquiries by
members of the public concerning the handling of insurance claims and alleged
misconduct by insurers or producers.
(b) The commissioner shall not decline to
investigate complaints for any of the following reasons:
(1) The insured is represented by an attorney in a dispute with the insurer, or is in mediation or arbitration;
(2) The insured has a civil action against the insurer; or
(3) The complaint is from an attorney, if the complaint is based upon evidence or reasonable beliefs about violations of law known to an attorney because of a civil action.
(c) The commissioner may defer the investigation until the finality of a dispute, mediation, arbitration, or civil action involving the claim is known.
(d)
As the commissioner deems appropriate, and pursuant to section 431:2-A, the
commissioner shall provide for the education of, and dissemination of
information to, members of the general public or licensees of the insurance
division concerning insurance matters.
§431:2-C Complaints; notification to complainant
and others; evaluation of complaint patterns. (a) The commissioner shall, upon
receipt of a written complaint with respect to the handling of an insurance
claim or other obligation under a policy by an insurer or producer, or alleged
misconduct by an insurer or producer, notify the complainant of the receipt of
the complaint within ten working days of receipt. Thereafter, the commissioner shall notify the
complainant of the final action taken on that complaint within thirty days of
the final action.
(b) The commissioner shall include with each
notification of final action, or, at minimum, with a number of randomly
selected notifications of final action sufficient to assure the validity of
results, a complaint handling evaluation form.
The form shall clearly and concisely seek an evaluation of the insurance
division's performance in handling the complainant's grievance. The areas of evaluation shall include but not
be limited to:
(1) Whether the complaint was handled in a fair and reasonable manner, evaluated thoroughly, and without bias;
(2) The time required for resolution of the complaint;
(3) Whether the complaint was referred and, if so, whether it was referred within a satisfactory time;
(4) Whether the staff involved in handling the complaint demonstrated adequate knowledge of the issues involved in the complaint;
(5) Whether the complainant was satisfied with the result of the insurance division's intervention; and
(6) Whether the complainant would recommend the insurance division's complaint handling services to others.
The commissioner shall, if deemed appropriate, notify insurers or producers against whom the complaint is made of the nature of the complaint, may request appropriate relief for the complainant, and may meet and confer with the complainant and the insurer to mediate the complaint. This section shall not be construed to give the commissioner power to adjudicate claims.
(c) The commissioner shall ascertain patterns of complaints by insurer, geographic area, insurance line, type of violation, and any other valid basis the commissioner may deem appropriate for further investigation, and periodically evaluate the complaint patterns to determine additional audit, investigative, or enforcement actions that may be taken by the commissioner, and report on all actions with respect to those patterns of complaints in the commissioner's annual report to the legislature pursuant to section 431:2-211, and to the public.
(d) For the purposes of this section, "complaint" means a written complaint received by the commissioner pursuant to subsection (a), and written complaints received by the commissioner from any other sources, alleging misconduct or unlawful acts by insurers or producers.
§431:2-D Meetings with persons and organizations;
dissemination of information. The commissioner may in person or through
employees of the division meet with persons, organizations, and associations
interested in insurance for the purpose of securing cooperation in the
enforcement of the insurance laws of the State and may disseminate information
concerning the insurance laws of the State for the assistance and information
of the public.
§431:2-E Emergency regulations; notice and text to
be mailed to persons, groups, and associations filing requests. (a) Notwithstanding the provisions of any other
law, this section shall apply to the adoption by the commissioner of any rule
as an emergency rule pursuant to chapter 91.
(b) At least five working days
before the submission of the emergency regulation to the office of the
lieutenant governor, the commissioner shall mail a notice of proposed emergency
rule to every person, group, or association who had previously filed a request
for notice of regulatory actions with the commissioner.
(c) The notice of proposed
emergency rule shall include the following:
(1) A description of the problem and the
necessity for the rule;
(2) A description of the justification for
adoption of the rule as an emergency rule; and
(3) A copy of the text of the proposed
emergency regulation.
§431:2-F Letter opinions; legal opinions. A letter or legal opinion signed by
the commissioner that was prepared in response to an inquiry from an insured or
other person or entity and that discusses either generally or in connection
with a specific fact situation the application of this chapter or rules adopted
by the commissioner shall be made public. The department of commerce and consumer affairs
may redact the name, address, policy number, and other identifying information
regarding a particular insured or other person or entity from the letter or
legal opinion when it is made public. A
letter or legal opinion made public by this section shall not be construed as
adopting an order, guideline, or administrative rule pursuant to chapter 91.
§431:2-G Extraordinary circumstances; defined. (a)
In determining noncompliance with this chapter and rules adopted
pursuant to this chapter, and appropriate penalties, if any, the commissioner
may consider evidence concerning the existence of extraordinary circumstances.
(b) A settlement agreement between the
commissioner and an insurer may not contain a provision referencing the
existence of extraordinary circumstances relative to the subject matter at
issue, unless the agreement specifies the precise period of time during which
extraordinary circumstances were in existence. Extraordinary circumstances shall not be
stated to exist for a duration of more than six months, unless all of the
following conditions are met:
(1) The commissioner makes a finding in
the agreement that extraordinary circumstances existed for more than six
months, and documents facts supporting that conclusion;
(2) The finding identifies the public
purpose justifying the extension of extraordinary circumstances beyond the
six-month period; and
(3) The beginning and ending date, by
month and year, of the commencement and termination of the extraordinary
circumstances are identified.
(c) For purposes of this section,
"extraordinary circumstances" means circumstances outside the control
of a licensee that severely and materially affect the licensee's ability to
conduct normal business operations.
§431:2-H Cancellation of insurance contracts; order
prohibiting insurance on risk under contract; violation of order. Whenever facts exist by reason of
which, under this chapter, or other laws the commissioner may suspend, revoke,
or deny any license or certificate of authority granted under this chapter, if
the making or maintenance in force of a contract of insurance is one of the
circumstances out of which facts arise, or, if, by reason of the existence of
those facts, or in connection therewith a contract of insurance is made or
maintained in force, the commissioner may, in lieu of or in addition to, the
suspension, revocation, or denial of license or certificate, by order require
the immediate cancellation of the contract; provided that the contract, by its
terms, is not subject to cancellation by the insurer and the insured did not
knowingly participate in the wrongful acts.
The commissioner may also notify the insured, stating the reason why the
cancellation was required.
In
such a case, whether or not the particular contract is required to be canceled
or is subject to cancellation, the commissioner may order the insurer,
insurance agent, broker, solicitor, surplus line broker, or life agent
soliciting, negotiating, or effecting the insurance to refrain from effecting
insurance upon the property, risk, or insured under the contract for not
exceeding five years from the date of the order.
The
commissioner may suspend or revoke, or deny an application for, any license or
certificate of authority granted under any provision of this code to any
applicant or licensee violating any order issued by the commissioner pursuant
to this section.
§431:2-I Availability of information on department
of commerce and consumer affair's website. (a)
Notwithstanding any other law, the department of commerce and consumer
affairs shall make available for public inspection and publish on its website
the following:
(1) All fully executed stipulations,
orders, decisions, settlements, or other forms of agreement resolving market
conduct examinations, whether the examinations were finalized, terminated, or
suspended, that pertain to unfair or deceptive practices in the business of
insurance as defined in article 13 of this chapter; and
(2) Every adopted report of a market
conduct examination of unfair or deceptive practices in the business of
insurance that is adopted as filed, or as modified or corrected, by the
commissioner; provided that the commissioner, upon adopting the report, shall
transmit a copy of the report, either electronically or by certified mail, to a
representative that the examined insurer designated by that insurer to receive
the report, or in the case of an examination of more than one insurer in an
insurer group, to a single representative of the group designated to receive
the report on behalf of all examined insurers; provided further that, within
twenty business days after the transmittal, the examined insurer may submit
comments to the commissioner relating to the adopted report. The comments shall be in a form and length as
provided by regulation; provided that twenty business days after
the transmittal, the commissioner shall publish on the department's website the
adopted report and any comments submitted by the examined insurer unless a
court of competent jurisdiction has stayed the publication of the report.
(b) The information in subsection (a) shall be
maintained in a current, up-to-date condition.
All identifying and privileged information regarding individual
policyholders shall be redacted from documents available for public inspection.
(c) This section shall not be construed to require the disclosure of company workpapers or other company documents discovered during the course of an examination or any preliminary report of the examination, except as otherwise permitted by law.
§431:2-J Working group to identify, assess, and
recommend risk transfer market mechanisms to promote investment in natural
infrastructure to reduce risks of climate change related to catastrophic
events. (a) The commissioner shall convene a working
group to identify, assess, and recommend risk transfer market mechanisms that:
(1) Promote investment in natural
infrastructure to reduce the risks of climate change related to catastrophic
events;
(2) Create incentives for investment in
natural infrastructure to reduce risks to communities; and
(3) Provide mitigation incentives for
private investment in natural lands to lessen exposure and reduce climate risks
to public safety, property, utilities, and infrastructure.
(b) To the extent that the working group
recommends risk transfer market mechanisms that would be provided by insurance
and reinsurance companies, the working group shall recommend mechanisms that:
(1) Are profitable to insurance and
reinsurance companies; and
(2) If appropriate, apply to communities
or regions, rather than individual land parcels.
(c)
The policies recommended pursuant to
subsections (a) and (b) shall include all of the following considerations:
(1) Hawaii analogies to examples in
other countries for creating incentives for investment in natural
infrastructure as part of insurance policies that mitigate elemental risks;
(2) Use of insurance to create
incentives for wetland restoration to help defend the coast against storm
surge;
(3) Creation of incentives for forests
to be managed to reduce the risk of major fires;
(4) Reducing the exposure of insurance
companies to climate change related losses through innovated state policies or
insurance pricing mechanisms that reward good behavior and charge premiums for
actions that increase public safety risks or losses of property or environmental
attributes; and
(5) Development of rating systems based
on community risk factors to climate events, and the use of insurance
incentives to make communities more resilient.
(d) The commissioner shall include in the annual report required under section 431:2-211 a report of the working group's findings and recommendations, including any proposed legislation."
SECTION 2. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Insurance Commissioner; Insurance Division; Insurance Providers; Complaints; Inquiries; Enforcement
Description:
Requires the Insurance Commissioner to establish a program to investigate complaints, respond to inquiries, and bring enforcement actions against insurers. Requires the Insurance Commissioner to provide to an insurer a description of any complaint against the insurer that the Commissioner has received and has deemed to be justified. Authorizes the Insurance Commissioner to receive complaints and inquiries, investigate complaints, prosecute insurers, and respond to complaints and inquiries by members of the public concerning the handling of insurance claims and alleged misconduct by insurers. Requires the Insurance Commissioner to notify a complainant of the receipt of the complaint within ten working days of receipt, notify the complainant of the final action taken on that complaint within thirty days of the final action, and include a complaint handling evaluation form that clearly and concisely seeks an evaluation of the Insurance Division's performance in handling the complainant's grievance. Requires the Insurance Commissioner to disseminate certain information and provide certain notices, and make letter and legal opinions public. Defines extraordinary circumstances. Requires the Department of Commerce and Consumer Protection to post certain information on its website. Establishes a working group to identify, assess, and recommend certain risk transfer market mechanisms.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
